Entireti boss slams soaring licensing costs

The Financial Services Council has proposed a major overhaul of Australia’s financial advice licensing fees, including a minimum levy of $25,000 per licensee. The plan has drawn sharp criticism from one of the industry’s largest firms.

Entireti chief executive Neil Younger called the current fee structure “crazy” during the FSC’s Shaping Advice Summit in Sydney this week. Under the existing model, licensees pay a base levy of $1,500, plus $2,300 for each adviser they employ. Smaller firms with fewer advisers pay less, though the FSC argues these firms pose a higher supervisory risk.

The proposed changes aim to reverse that imbalance. A moderate adjustment would generate an annual levy pool of $65.1 million across 1,585 licensees, while a stronger version could push the total to $67.3 million from 1,495 licensees. The shift would lower per-adviser costs but raise the fixed burden on all licensees.

Younger, who has led Entireti since 2017 and joined the FSC board in April, said the current system does not reflect the true cost of supervision. He pointed out that each new license issued adds only $1,500 to ASIC’s revenue, which he called insufficient given the responsibility licensees hold for advice quality. “There needs to be a structure to ensure licensees meet their obligations,” he told the summit.

He acknowledged the proposal would face opposition. Some may see it as an attempt by larger firms to disadvantage smaller ones, but Younger rejected that view. He said the industry recognizes the significant responsibility that comes with holding a license.

The debate unfolds as the sector awaits an update to the Delivering Better Financial Outcomes (DBFO) legislation, expected from Assistant Treasurer Daniel Mulino soon. At the same summit, Younger and two other chief executives—Andrew Alcock of HUB24 and Kate Farrar of Brighter Super—shared their priorities for reform.

Younger focused on education standards. “The simplest change is to improve education standards,” he said. “We need to increase the supply of advisers. Right now, it’s nearly impossible to bring new people into the system due to limited resources.”

Farrar, whose background is in superannuation, argued for stricter oversight of responsible entities (REs). She said targeted regulatory changes could address the root causes of harm, citing recent collapses like Shield and First Guardian. REs operate under lighter requirements than responsible superannuation entities, despite their key role in the financial system.

“If REs want to participate in our superannuation system, they should meet the same obligations,” she said. “Some adjustments are necessary.”

Alcock emphasized collaboration. He suggested setting shared goals for the industry, such as increasing the number of people receiving advice or improving financial literacy. “We can fix what’s broken, but we should also plan for the future,” he said.

A unified effort involving regulators, government, industry, and consumer groups could create a long-term plan to resolve strategic differences. The FSC’s proposals are now open for feedback, but with the DBFO update approaching, time for debate is limited.

Younger stressed the importance of accountability. “Maintaining a license requires meeting certain standards,” he said. “The system must include checks to ensure consumers benefit.”